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Infrastructure – Increasing sophistication of investors

Preqin has launched its 2015 Preqin Global Alternatives Reports, revealing significant growth in assets held by private equity, hedge fund, private debt, real estate and infrastructure fund managers. Total industry assets now stand at USD6.91tn*, up from USD6.22tn as of this point last year.

Infrastructure enjoyed another year of solid growth in 2014, with the prospects for continued expansion looking good for 2015 and beyond. Assets under management for unlisted infrastructure managers reached an all-time high, having increased by 85% over the past five years.

The 2015 Preqin Global Infrastructure Report provides a comprehensive review of the industry along with contributions from respected industry figures and the outlook for the coming year. Some of the key findings in the report are as follows:

• Infrastructure assets are at a record high of USD296bn as of June 2014, up from USD244bn a year before.
• Investors are seeking exposure to infrastructure through a variety of methods, with 56% of investors expressing an interest in making direct investments in infrastructure assets over the coming year.
• The average size of infrastructure funds closed in 2014 reached USD1.0bn, compared to USD688m in 2013.

The attractions of infrastructure are evident to most institutions, and there is the potential for it to become a significant mainstream asset class for the majority of institutions with a long-term mandate, in the same way as private equity. Looking ahead to 2015, pricing of assets has become a key issue for infrastructure investors – in common, it must be said, with other areas of the market. The significant levels of dry powder available to fund managers and continuing low interest rates have combined to push asset valuations upwards to levels where investors see challenges in finding assets at prices they can feel comfortable with.

To find out more about the 2015 Preqin Global Alternatives Reports, including full contents and sample pages, visit our website

The USD6.91tn of industry assets is made up of USD3.02tn in hedge fund assets, USD3.79tn in private equity assets (which includes USD742bn in real estate assets, USD296bn in infrastructure assets and USD387bn in non-direct lending private debt assets), and USD97bn in direct lending assets.

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